Sharps Corner study finds site limits large-scale affordable housing; council discusses next steps

The Anacortes City Council on Aug. 11 received a city-contracted study of the 37-acre Sharps Corner property that concluded site constraints—wetlands, steep slopes and utility easements—substantially limit the area available for housing and commercial development.

John Coleman, the city’s director of planning, community and economic development, told the council the city-owned parcel southwest of the Sharps Corner roundabouts is encumbered by a natural-gas pipeline easement, power lines, steep slopes on the western side and a wetland complex around Howard Creek. "The buildable area is largely constrained," Coleman said, adding the study focused on roughly 5 to 5.5 acres of upland on the property’s east side as the most likely developable area.

Coleman framed the study in regional housing terms: countywide planning policies, he said, anticipate a need for about 2,900 housing units through 2045, including roughly 1,535 units at 0–50% area median income (AMI). The study evaluated several development scenarios for the Sharps Corner parcel, including smaller-scope options that would yield few units and larger scenarios that assumed multifamily construction and use of Low-Income Housing Tax Credits. Coleman emphasized the study did not perform a formal wetland delineation and recommended that as a next step if the council wants certainty about usable acreage.

Councilmembers pressed on feasibility and alternatives. Councilmember Walters flagged the natural-gas pipeline running through the site as a material constraint: while the report notes a 50-foot or 100-foot easement, Walters cited federal safety formulas and said there is effectively about a 100-foot potential impact radius around the pipeline. He said he is “less comfortable placing low-income residential within that impact radius.” Walters also noted a feasibility gap figure cited in the study—about $49,000 per unit in one scenario—meaning the estimated cost to build exceeded what could be funded without subsidy by roughly that amount per unit.

Several councilmembers recommended broader thinking about the property’s future beyond exclusively low-income housing. Councilmember Young and others suggested options such as mixed-income housing, incubator or industrial laydown space, or traded parcels in exchange for more centrally located sites; Councilmember Kaluen McGrath suggested senior or memory-care housing as a use to explore. Members repeatedly noted the need to coordinate transportation (Skagit Transit) if housing were developed at the site.

On next steps, Coleman and councilmembers discussed two staff-driven approaches rather than a council vote: (1) budget a formal wetlands delineation to determine exact usable acreage (several members asked that this be included in the 2026 budget cycle), and (2) if council remains interested, prepare a request for qualifications (RFQ) or similar solicitation to see whether a development partner could make a project feasible. Coleman said the city now has a preliminary methodology for evaluating proposals and could pursue those next steps if directed.

No formal council action or vote on sale, donation or rezoning of the property occurred at the meeting. Councilmembers asked staff to return with cost estimates and draft language for any RFQ or budget request and to coordinate with transit and other stakeholders if housing is pursued.